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RealGM Wiretap

Tilman Fertitta: Rockets Sitting On A Huge Revolver And A Bunch Of Cash Right Now

May 1, 2020 11:59 AM

There has been speculation on the financial solvency of Tilman Fertitta due to COVID-19 as he paid a record $2.2 billion for the Houston Rockets in September 2017 and owns a number of restaurants impacted by the pandemic.

“The Rockets would never be sold, unless the whole world came to an end and then it wouldn’t matter, ok?” said Fertitta to Sam Amick of The Athletic. “If I ever sell the Rockets, it’s because we don’t exist anymore as a country with the rule of law. We’re having anarchy in the street, and at that point there’s no buyers.

“There’s a reason that I made it through the ’87 financial crisis, and 2000, and the 2007 (recession), because I’ve always kept so much liquidity. It’s just like me borrowing $300 million a few weeks ago (at a steep rate of 13 percent, according to The Houston Chronicle), when I was able to do it when nobody else could at first. …Why not buy even more insurance? I have a huge amount of liquidity, and a lot of different sources of income. I’m not happy right now (with the financial impact), but I haven’t taken an equity partner, I didn’t have to give up warrants to borrow money. …”

Fertitta has zero interest in selling any minority ownership stakes.

“I don’t need partners so I don’t have partners,” he said. “There’s just no interest in having partners. I think all owners would love not to have partners, but not all teams financially can do that. I have the opportunity that me and my family can own this team 100 percent, and there’s no reason to ever change that.”

The Rockets have not had any layoffs or pay cuts due to COVID-19.

“Absolutely not one,” Fertitta said. “We’ve had no pay cuts. We didn’t apply for any funds within the Rockets, governmental or anything.”

The Rockets rank 13th in the NBA in payroll at $130 million.

“The Rockets have no problem,” he said. “The Rockets are sitting on a huge revolver and a bunch of cash right now. And the Rockets are able to build up cash because nobody has to take it out to live on.”